- Hospitality companies have warned the Treasury of further job cuts
Britain’s pubs, restaurants and hotels saw the fastest rise in business costs last month, after tax and duty fell in the October Budget.
Tourism and leisure companies implemented the biggest cost increases of all industries surveyed, according to the latest Lloyds UK Sector Tracker.
Hospitality and marketing agencies have warned that the Labor Government Finance that could mean even more job cuts and facility closings.
Chancellor Rachel Reeves said the rate of relief enjoyed by hospitality operators on their business rates bill would be reduced from 75 per cent to 40 per cent, with costs of up to £110,000 per business.
Employers will also pay a National Insurance rate of 15 per cent on employee wages above £5,000, rather than the current 13.8 per cent rate on wages over £9,100.
And the National Living Wage will rise by 6.7 per cent to £12.21 an hour, while the minimum wage for 18 to 20-year-olds will rise by 16.3 per cent to £10 an hour.
Budget drop: Britain’s pubs, restaurants and hotels saw the fastest rise in prices last month, according to the latest Lloyds UK Sector Tracker
Since the revelations of the measures, pub chains including JD Wetherspoon, Fuller’s and Young’s have warned of multi-million-pound cost implications.
Lloyds UK said the level of price increases reported by tourism and leisure industries last month measured 67.5 on its index, compared to 66.3 in October.
Numbers above 50 indicate an overall increase compared to the previous month, and a number below 50 indicates a decrease.
Only two of the 14 sectors surveyed by Lloyds did not increase prices in November, the same as the previous month.
Lloyds also found that companies’ future output expectations fell to their worst level for nearly two years.
Among the industries with the largest turnover in production is health, with a score of 40.8, followed by metals and mining, with 42.3, and the manufacture of household products, and 42.7.
The number of firms that said inflationary pressures would affect their future operations rose to nine times the long-term average (9.23 in November to 3.45 in October).
Nikesh Sawjani, chief UK economist at Lloyds, said: ‘Weak output expectations and rising inflation concerns are a reflection of the problems facing businesses at the moment.
‘As we approach the end of 2024, businesses are already gearing up and preparing for what is expected to be a strong start to the New Year.’
UK inflation rose to 2.3 percent in the 12 months ending in October, just above the Bank of England’s 2 percent target.
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